Opinion
E066961
06-13-2018
HENRY AGUILA, Plaintiff and Respondent, v. DAVID MCCAMMACK et al. Defendants and Appellants; JAMES F. PENMAN, Objector and Appellant.
Arias & Lockwood, Christopher D. Lockwood; James F. Penman, in pro. per., for Defendants, Appellants, and Objector. Law Offices of George A. Saba, George A. Saba; Henry Aguila, in pro. per. for Plaintiff and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super.Ct.No. CIVDS1600009) OPINION APPEAL from the Superior Court of San Bernardino County. Brian S. McCarville, Judge. Reversed. Arias & Lockwood, Christopher D. Lockwood; James F. Penman, in pro. per., for Defendants, Appellants, and Objector. Law Offices of George A. Saba, George A. Saba; Henry Aguila, in pro. per. for Plaintiff and Respondent.
I. INTRODUCTION
Defendants and appellants, David and Wendy McCammack, appeal from the trial court's order denying their special motion to strike under Code of Civil Procedure section 425.16 (anti-SLAPP motion). Plaintiff and respondent, Henry Aguila, sued the McCammacks for slander and defamation, alleging they referred to him as a drug dealer and felon who "'worked with the Mexican drug Cartel.'" The alleged statements arose at a time when Aguila was purportedly buying a country club across the street from the McCammacks, and his lessee was applying for a liquor license at the club.
All further statutory references are to the Code of Civil Procedure unless otherwise indicated.
SLAPP stands for "'strategic lawsuit against public participation.'" (Baral v. Schnitt (2016) 1 Cal.5th 376, 381, fn. 1 (Baral).)
We will occasionally refer to the McCammacks by their first names to avoid confusion.
The McCammacks contend the court erred in denying their anti-SLAPP motion, and we agree. Their alleged statements constituted protected activity under the anti-SLAPP statute. Their alleged statements were in connection with the lessee's application for a liquor license before an official governmental body, and their subsequent protest of the license application. Once the McCammacks established their conduct constituted protected activity, Aguila had to show a probability of success on the merits of his claims. He did not make this showing. We therefore reverse the order denying the anti- SLAPP motion and the order granting Aguila attorney fees and costs, which the McCammacks also appealed.
II. FACTS AND PROCEDURE
A. Allegations of the Complaint
Aguila's complaint for slander and defamation seeks damages for an alleged "calculated act of character assassination." According to the complaint, Aguila is the sole shareholder of Thee Aguila, Inc., which acquires real property as investments. Arrowhead Country Club owns a "golf club" in San Bernardino, California that it offered for sale. (Capitalization omitted.) Aguila agreed to purchase the club and opened an escrow for that purpose. Roger Work is president of the board of directors of the Arrowhead Country Club. On November 9, 2015, David allegedly asked Work not to sell the club to Aguila because he "'is a felon.'" Wendy allegedly told members of the club that Aguila was "'a drug dealer'" and "'convicted felon'" who "'worked with the Mexican drug Cartel.'" Aguila has never been a drug dealer or convicted felon, and he has never associated with a Mexican drug cartel. The complaint alleges the McCammacks failed to use reasonable care to determine the truth or falsity of their statements, and their statements were a substantial factor in causing harm to Aguila's business and reputation. B. The McCammacks' Anti-SLAPP Motion
The McCammacks filed an anti-SLAPP motion arguing Aguila's complaint arose from protected activity and was not likely to succeed on the merits. They argued any alleged statements concerned an issue of public interest and were privileged under Civil Code section 47, subdivision (c), and moreover, Aguila could not prove they actually made the alleged statements. We summarize the pertinent evidence submitted with the motion.
Wendy and David are a married couple who live across the street from the Arrowhead Country Club. They were members of the country club for approximately 16 years but cancelled their membership in 2013. They still frequently attend social events at the country club as guests of members. In addition, for 13 years Wendy represented the Arrowhead Country Club neighborhood as a city council member for the seventh ward of the City of San Bernardino. Her tenure on the city council ended in 2013.
In July 2015, the McCammacks received a notice from the Department of Alcoholic Beverage Control (the DABC) stating that "Roberto Hernandez," doing business as "Thee Arrowhead Country Club," had applied for a license to sell and serve alcoholic beverages at the country club. The DABC addressed the notice to "Resident," at the McCammacks' address. (Capitalization omitted.) The notice stated the country club would provide recorded music, live entertainment, and dancing, and the applicant proposed serving alcoholic beverages from 7:00 a.m. to 2:00 a.m. daily.
Wendy looked up Hernandez on the DABC Web site to see whether he held any other liquor licenses. Based on information Wendy learned from the DABC Web site and other Arrowhead Country Club members, the McCammacks e-mailed the DABC in July 2015 to formally protest Hernandez's application for a liquor license. David was concerned a new operator of the country club would change the "family-oriented nature" of the club and the surrounding neighborhood and disturb the "quiet and peaceful enjoyment" of their home. The McCammacks' e-mail to the DABC stated, in pertinent part: "As a property owner on Parkdale which is located in a RESIDENTIAL NEIGHBORHOOD, we have done the research at the other establishments this Applicant owns and operates and this location is NOT suitable for the parties, events and night club operations that will occur per this applicant's assertions to the current members of the Country Club. . . . All properties surrounding this location are residential and events and functions that this applicant is accustomed to offering to the public will NOT be a suitable match to this neighborhood. Therefore we are in OPPOSITION to this license transfer."
Wendy later informed the DABC and other country club members that the McCammacks were willing to withdraw their protest if Hernandez would agree to certain restrictions. The McCammacks wanted events at the country club to end earlier than 2:00 a.m., and they wanted to restrict the noise level.
David was at the Arrowhead Country Club on November 9, 2015, when the board president, Work, asked him why they had filed a protest with the DABC. David responded, "'you're not going to sell the club . . . to a felon are you?,'" or a substantially similar question. David did not speak of Aguila specifically and was only trying to verify a rumor he had heard that the buyer was a felon. David did not know the buyer's true identity then. David assumed it might be Hernandez, the applicant of the liquor license. At no time did David accuse Aguila of being a felon.
The McCammacks agreed to a meeting on December 29, 2015, at the local DABC office to discuss resolving their protest. Before that could occur, on December 23, 2015, Aguila served them with a lawsuit for slander and defamation. Wendy had never heard of Aguila and did not know he was attempting to buy the Arrowhead Country Club before receiving the lawsuit. The service of the complaint was also the first time David learned of Aguila's name. The McCammacks do not recall making any of the statements attributed to them in the complaint. They refused to negotiate any resolution of their protest "'under the gun'" of a lawsuit. The day before the December 29 meeting, Aguila voluntarily dismissed his lawsuit without prejudice. The McCammacks attended the meeting at the DABC office but did not resolve the protest that day. On January 4, 2016, Aguila served the instant lawsuit, which was identical to the lawsuit he had dismissed just days earlier. C. Aguila's Opposition
In his opposition, Aguila argued the McCammacks' statements about him were not in connection with a public issue, insofar as Aguila did not apply for a liquor license—Hernandez did. Moreover, he argued, his complaint made a prima facie showing that he was likely to prevail.
As far as evidence, Aguila submitted only his own declaration in support of his opposition. According to Aguila, his corporation, Thee Aguila, Inc., entered into an agreement to purchase the country club. Pending the close of escrow, the corporation leased the property to Hernandez, who then applied to the DABC for a transfer of the liquor license. As to the facts underlying his causes of action, the declaration states: "On November 9, 2015, Defendants asked Mr. Work, the president of the Board of Directors of Arrowhead Country Club, not to sell the Golf Club to me, because I was (1) a felon; (2) was a drug dealer; (3) was a convicted felon; (4) that Plaintiff worked with the Mexican drug cartel (Complaint ¶ 10). Defendants, and each of them, published these false statements to various members of the Arrowhead Country Club, who understood by those who heard the statements to refer to Plaintiff in a way that defamed Plaintiff's reputation." D. The Court's Denial of the Anti-SLAPP Motion and Granting of Attorney Fees and Costs
The court denied the McCammacks' anti-SLAPP motion. It concluded Aguila "was not a party to the [D]ABC proceeding. Therefore, any defamatory speech is not protected," and the McCammacks had "failed to show the comments were subject to the furtherance of the defendant's [sic] right of petition or free speech." Moreover, it found Aguila had "met his burden of probably prevailing" because it "appear[ed] from the pleadings that the defendant's [sic] statements are reckless and making an allegation without delineating any specific proof." The court also indicated it would award Aguila attorney fees upon a noticed motion.
Aguila then moved for $23,010 in attorney fees and costs under section 425.16, subdivision (c). The court concluded the anti-SLAPP motion was frivolous and awarded Aguila only a portion of the fees and costs he requested—$8,250.
III. DISCUSSION
The McCammacks contend the court erred because (1) their alleged conduct arose from protected activity under the anti-SLAPP statute, and (2) Aguila did not show a probability of success on the merits. They further argue the court erred in awarding Aguila attorney fees because he should not have prevailed. We agree the McCammacks should have prevailed on the anti-SLAPP motion and Aguila was not entitled to attorney fees and costs.
The McCammacks also contend the court erred in sustaining a number of evidentiary objections to their declarations. The excluded evidence is largely irrelevant to our determination and we thus do not address most of these arguments. We address only a few erroneously sustained objections because the evidence they excluded is relevant to our disposition. A. The Court Should Have Granted the Anti-SLAPP Motion
"California's anti-SLAPP statute provides that '[a] cause of action against a person arising from any act of that person in furtherance of the person's right of petition or free speech . . . shall be subject to a special motion to strike, unless the court determines . . . there is a probability that the plaintiff will prevail on the claim.'" (Baral, supra, 1 Cal.5th at p. 381, quoting § 425.16, subd. (b)(1).) "Resolution of an anti-SLAPP motion involves two steps. First, the defendant must establish that the challenged claim arises from activity protected by section 425.16. [Citation.] If the defendant makes the required showing, the burden shifts to the plaintiff to demonstrate the merit of the claim by establishing a probability of success." (Baral, supra, at p. 384.) In making these determinations, "the court shall consider the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based." (§ 425.16, subd. (b)(2).) We review a ruling on an anti-SLAPP motion de novo. (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 820.)
1. Step One: The Challenged Causes of Action Arise from Protected Activity
At this step, we accept as true the plaintiff's pleaded facts. (Young v. Tri-City Healthcare Dist. (2012) 210 Cal.App.4th 35, 54.) Thus, while we may consider declarations and other evidence in addition to the complaint, the evidence may only elucidate the allegations of the complaint, not contradict them. We do not get into the merits of the causes of action, but simply identify whether the defendant's conduct falls within the definition of protected activity. (Young v. Tri-City Healthcare Dist., supra, 210 Cal.App.4th at p. 54; Coretronic Corp. v. Cozen O'Connor (2011) 192 Cal.App.4th 1381, 1388.)
The McCammacks contend their alleged conduct constituted protected activity because it related to an official proceeding authorized by law (§ 425.16, subd. (e)(2)) or an issue of public interest (§ 425.16, subd. (e)(4)). We agree their alleged conduct both related to an official proceeding and concerned an issue of public interest.
(a) The Alleged Statements Were in Connection With an Issue Under Review in an Official Proceeding
Subdivision (e) of section 425.16 sets forth four categories of protected activity, which the courts must construe broadly. (§ 425.16, subd. (a).) Among them is "any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law." (§ 425.16, subd. (e)(2).) "[A]ny other official proceeding" means a governmental forum. (Ibid.; Olaes v. Nationwide Mutual Ins. Co. (2006) 135 Cal.App.4th 1501, 1507.) A statement is "'in connection with'" an issue under consideration by a governmental body "if it relates to a substantive issue in the proceeding and is directed to a person having some interest in the proceeding." (Fremont Reorganizing Corp. v. Faigin (2011) 198 Cal.App.4th 1153, 1167.) The statement need not be made before the governmental body. (§ 425.16, subd. (e)(2); Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2017) ¶ 7:654, p. 7(II) 21.)
Here, the McCammacks' alleged statements were in connection with an issue under review by a governmental body—Hernandez's application for a liquor license and the McCammacks' subsequent protest with the DABC. We begin with some background on the DABC's process of liquor licensing. "The California Constitution grants the [DABC] exclusive authority to issue licenses for the sale of alcoholic beverages subject to any limitations the Legislature enacts. (Cal. Const., art. XX, § 22.)" (Nick v. City of Lake Forest (2014) 232 Cal.App.4th 871, 876.) The Constitution also empowers the DABC to deny a liquor license if it "determine[s] for good cause that the . . . license would be contrary to public welfare or morals," or that the license applicant "has violated any law prohibiting conduct involving moral turpitude." (Cal. Const., art. XX, § 22.) Among other things, an applicant for a liquor license must verify under oath that he or she has not been convicted of a felony. (Bus. & Prof. Code, §§ 23952, 23954.) If the applicant cannot, he or she must disclose the felony violation or set forth "reasons which will prevent the applicant from being able to comply with" this requirement. (Bus. & Prof. Code, § 23952.)
Once the DABC receives an application for a liquor license or transfer of a license, it "shall make a thorough investigation to determine whether the applicant" and the subject premises "qualify for a license," and whether the applicant has complied with all provisions of the Alcoholic Beverage Control Act. (Bus. & Prof. Code, §§ 23000, 23958.) It also "shall investigate all matters connected" with these issues "which may affect the public welfare and morals." (Bus. & Prof. Code, § 23958.) Individuals may file a protest to the application, but the DABC may reject the protest if it determines the protest is "false, vexatious, frivolous, invalid or unreasonable, or without reasonable or probable cause." (Bus. & Prof. Code, § 24013, subd. (b).) And, if the DABC rejects a protest and issues the license, the protestants may then "file an accusation" with the DABC "alleging the grounds of protest as a cause for revocation of the license," and the DABC must hold a hearing. (Ibid.)
Against this background, it is clear the McCammacks' alleged statements concerned the liquor license application and their protest—"an issue under consideration or review" in an "official proceeding." (§ 425.16, subd. (e)(2).) The DABC had a duty to investigate whether granting the liquor license to Hernandez would be contrary to the public welfare or morals. The McCammacks received notice of Hernandez's application for a liquor license, which indicated he intended to provide music and dancing and serve drinks until 2:00 a.m., and filed their protest with the DABC. This protest was what prompted the conversation between the board president and David, when, according to the complaint, David allegedly asked him not to sell the country club to Aguila because he was a felon. According to the complaint, Wendy allegedly told members of the country club that Aguila was a drug dealer and felon who worked with a Mexican drug cartel. Aguila was buying the country club and pending the close of escrow had leased it to Hernandez, who then applied for the liquor license. Whether Aguila, as the buyer and new owner of the club, was a felon, drug dealer, or associate of a drug cartel was certainly relevant to the DABC's "public welfare or morals" determination. (Cal. Const., art. XX, § 22.)
The extent of the relationship between Hernandez and Aguila would likely interest the DABC, given this information about Aguila's alleged background, and raise several questions. At the very least, Hernandez was in business with Aguila. But was it simply an arm's length business transaction, or something closer? Aguila's assertion that he was somehow able to lease the country club to Hernandez before escrow had even closed suggests it was something closer. If Aguila, as the owner of the club, had a felony conviction, was the lease arrangement merely an attempt to avoid obstacles in obtaining the license? The DABC may deny an application, after all, if the applicant has a conviction for a crime of moral turpitude. And if the application for a liquor license fails to disclose partners who co-own the business that will be using the liquor license, this in and of itself is a violation of the Alcoholic Beverage Control Act and grounds for denial or revocation of the license. (Martin v. Alcoholic Bev. etc. Appeals Bd. (1959) 52 Cal.2d 287, 289-293 [affirming the DABC's revocation of a license for failure to disclose a partner in the business].) In short, while the McCammacks' alleged statements concerned Aguila and not Hernandez, there was no requirement that Aguila be the liquor license applicant for this category of protected activity to apply. The alleged statements must simply relate to substantive issues in the proceeding, and they did—whether the "license would be contrary to public welfare or morals" and whether the application had accurately disclosed all partners in the business. (Cal. Const., art. XX, § 22.)
Moreover, the McCammacks made their alleged statements to people having an interest in the DABC proceeding—the country club board president and other members of the country club. (Fremont Reorganizing Corp. v. Faigin, supra, 198 Cal.App.4th at p. 1167 [holding that a statement constitutes protected activity if it relates to a substantive issue in an official proceeding "and is directed to a person having some interest in the proceeding."].) These people had the same right as the McCammacks to file protests to the liquor license application, particularly as the application concerned activities that would be occurring at their club. In sum, because the McCammacks' alleged statements related to substantive issues in an official proceeding, and they directed them to people with an interest in the proceeding, their alleged conduct was protected by the anti-SLAPP statute. (§ 425.16, subd. (e)(2).)
(b) The Alleged Statements Also Concerned an Issue of Public Interest
Another category of protected activity is "any other conduct in furtherance of the exercise of . . . the constitutional right of free speech in connection with a public issue or an issue of public interest." (§ 425.16, subd. (e)(4).) An issue of public interest includes governmental matters. (Ruiz v. Harbor View Community Assn. (2005) 134 Cal.App.4th 1456, 1468.) Whether granting Hernandez's liquor license application would be contrary to public welfare or morals fell well within the boundaries of a public interest issue. Thus, for the same reasons the McCammacks' alleged statements were in connection with an official proceeding, they were in connection with an issue of public interest.
2. Step Two: Aguila Did Not Establish a Probability of Success
Given that the McCammacks prevailed at step one, the burden shifted to Aguila to demonstrate the merits of his claims by establishing a probability of success. This he failed to do.
"We have described this second step as a 'summary-judgment-like procedure.' [Citation.] The court does not weigh evidence or resolve conflicting factual claims. Its inquiry is limited to whether the plaintiff has stated a legally sufficient claim and made a prima facie factual showing sufficient to sustain a favorable judgment." (Baral, supra, 1 Cal.5th at pp. 384-385, fn. omitted.) We accept the plaintiff's evidence as true and determine whether the defendant's evidence defeats the plaintiff's claim as a matter of law. (Id. at p. 385.)
While we must credit the plaintiff's evidence, the plaintiff cannot merely rely on the allegations of the complaint to show a probability of success. (ComputerXpress, Inc. v. Jackson (2001) 93 Cal.App.4th 993, 1010.) He or she must make a showing with evidence that is competent and admissible at trial. (Tuchscher Development Enterprises, Inc. v. San Diego Unified Port Dist. (2003) 106 Cal.App.4th 1219, 1236; Evans v. Unkow (1995) 38 Cal.App.4th 1490, 1497.) For instance, a witness's testimony is insufficient if the witness has no personal knowledge of the matter in dispute. (Tuchscher Development Enterprises, Inc. v. San Diego Unified Port Dist., supra, at p. 1236.)
Strictly speaking, slander is a type of defamation, not a cause of action separate from defamation. (Civ. Code, § 44 [defining defamation as either libel or slander].) "Slander is a false and unprivileged publication, orally uttered . . . ." (Civ. Code, § 46.) The defendant's utterance of a falsehood is thus an essential element. (Seelig v. Infinity Broadcasting Corp. (2002) 97 Cal.App.4th 798, 809.)
Here, Aguila's evidence did not meet even the minimal prima facie showing required to establish a probability of success. He did not proffer competent and admissible evidence that the McCammacks uttered falsehoods. The only evidence he submitted was his own declaration. He simply repeated the allegations of the complaint—the McCammacks told the board president and country club members that he was a felon, drug dealer, and associate of a Mexican drug cartel. But the "testimony of a witness concerning a particular matter is inadmissible unless he has personal knowledge of the matter." (Evid. Code, § 702, subd. (a).) Personal knowledge "means a present recollection of an impression derived from the exercise of the witness' [sic] own senses." (Cal. Law Revision Com. com., 29B pt. 2 West's Ann. Evid. Code (1995) foll. § 702, p. 300, italics added; see also Evid. Code, § 170 ["'Perceive' means to acquire knowledge through one's senses."].) No evidence established Aguila's personal knowledge of the McCammacks' conduct. His conclusory statement at the beginning of his declaration that he had personal knowledge of all facts in it does nothing more than state a legal conclusion. Aguila did not establish he was present when the McCammacks made their statements. He did not explain how he learned of the statements. Nor did he proffer declarations from other witnesses who allegedly heard the statements. Accordingly, putting aside his own inadmissible statements, he had no evidence whatsoever to show a probability of success. (Tuchscher v. Development Enterprises, Inc. v. San Diego Unified Port Dist., supra, 106 Cal.App.4th at p. 1238 [declining to consider statements lacking in foundation and personal knowledge, for purposes of establishing a probability of success on an anti-SLAPP motion].)
Because Aguila proffered no competent and admissible evidence of false utterances, the McCammacks' evidence defeated his claims as a matter of law. Neither of them recalled making the alleged statements about Aguila. In fact, neither of them knew of Aguila—either his name or that he was the buyer of the country club—until he served them with a complaint for defamation and slander. Their evidence establishes that, at most, David responded to the board president's question about why they were protesting Hernandez's liquor license application by asking if the president was going to sell the club to a felon. David assumed the buyer in question was Hernandez, and he was trying to verify the rumor he had heard that the buyer was a felon. He never expressly called Aguila a felon.
Even if David's question could reasonably be understood as calling Aguila a felon, such an utterance was privileged under Civil Code section 47, subdivision (c), the common-interest privilege. (Lundquist v. Reusser (1994) 7 Cal.4th 1193, 1196.) This qualified privilege establishes a defense to liability and thus defeats Aguila's complaint. (Terry v. Davis Community Church (2005) 131 Cal.App.4th 1534, 1558 ["'California permits no cause of action based upon the defamatory nature of a communication which is itself privileged under the defamation laws.'"].) The privilege applies when a statement is made "without malice, to a person interested therein, . . . by one who is also interested, or . . . who is requested by the person interested to give the information." (Civ. Code, § 47, subd. (c).) David and the board president shared a common interest in the background of the buyer of the club. Although David is no longer a member, he lives across the street from the club and frequently visits it, so he remains affected by what occurs there. Both parties—the communicator and the recipient—had an interest in the criminal background of the new owner and the issuance of a liquor license for events that could last until 2:00 a.m. (Civ. Code, § 47, subd. (c)(1); Terry v. Davis Community Church, supra, at p. 1556 [communications on church matters between church members, or between church members and parents of youth group members, qualified for common interest privilege].) More to the point, the board president undoubtedly had an interest in the buyer's background and the approval of the club's liquor license, and he requested that David give him the information—namely, why the McCammacks filed a protest with the DABC. David could explain his reasoning to the interested person who requested the information. (Civ. Code, § 47, subd. (c)(3).)
It is true the common-interest privilege does not apply "if the communication is made with malice, i.e., with a state of mind arising from hatred or ill will, evidencing a willingness to vex, annoy, or injure the person." (Terry v. Davis Community Church, supra, 131 Cal.App.4th at p. 1557.) Once the McCammacks established David spoke in a privileged setting, Aguila had the burden of showing David spoke with malice. (Lundquist v. Reusser, supra, 7 Cal.4th at pp. 1197, 1208.) But Aguila marshalled no evidence that David acted with hatred or ill will, rather than a genuine and legitimate concern over how the new ownership could affect the neighborhood and club environment. It would be difficult indeed to show hatred or ill will toward Aguila, given that David did not even know of him at the time.
In sum, the McCammacks established their alleged conduct constituted protected activity. The burden then shifted to Aguila to show a probability of success on the merits, which he failed to do. Consequently, the McCammacks were entitled to an order granting their anti-SLAPP motion, and we must reverse the order denying it. B. We Must Also Reverse the Order Granting Aguila Attorney Fees and Costs
The plaintiff is entitled to attorney fees and costs in connection with an anti-SLAPP motion only if he or she prevails and the court finds the motion was "frivolous" or "solely intended to cause unnecessary delay." (§ 425.16, subd. (c)(1).) Aguila is no longer a plaintiff prevailing on the motion. We must necessarily reverse the order awarding his attorney fees. C. For the Most Part, the McCammacks' Evidentiary Arguments Are Irrelevant, With a Few Exceptions
The McCammacks' trial counsel, James F. Penman, personally joined in their notice of appeal because of the court's ruling on Aguila's motion for attorney fees. Aguila sought "fees and costs to be paid jointly and severally by Defendants and their Counsel of Record, James F. Penman, Esq." (Italics added.) The court's order granting the motion for attorney fees and costs did not specify whether Penman was jointly and severally liable. Penman joined in the notice of appeal to preserve his right to challenge the attorney fees order and in an abundance of caution. We need not reach whether the court intended to make Penman jointly and severally liable, or whether that was proper, in light of our reversal of the order.
Aguila filed evidentiary objections to nearly every paragraph of the McCammacks' declarations. The trial court sustained many but not all of these objections. The McCammacks argue the trial court erred in sustaining a number of them, but for the most part, we need not address these arguments. Our summary of the evidence in part II.B. excludes the portions of the declarations to which the court sustained objections, with only a few exceptions.
The court's rulings on Aguila's objections is a somewhat convoluted issue. Both declarations contained errors in numbering the paragraphs. David's declaration contained two paragraphs numbered "3." Wendy's declaration contained two paragraphs numbered "3" and two paragraphs numbered "23." Aguila's objections attempted to account for the errors in numbering. For instance, his "Objection No. 3" to David's declaration moved to strike "paragraph 3" of the declaration. (Capitalization omitted.) Then, his "Objection No. 4" moved to strike "paragraph 3 (sic) (should be paragraph 4)" of the declaration. (Capitalization omitted.) His objections continued in this manner, noting the paragraph numbers assigned by the McCammacks, and also attempting to assign a corrected paragraph number. When the court issued its ruling on the objections, it simply noted which objections it was sustaining and overruling by referencing the objection numbers. Our interpretation of what evidence the court excluded is therefore guided by Aguila's approach in his objections. For example, when the court said it was overruling objection No. 4, we take that to mean it was overruling the objection to the second paragraph numbered "3." --------
The exceptions are portions of David's declaration stating: (1) he was at the country club on November 9, 2015, when the board president asked why he had filed a protest with the DABC; (2) he responded by asking the president if he was going to sell the club to a felon; (3) he did not speak of Aguila specifically and only wanted to verify a rumor he had heard that the buyer was a felon; and (4) he did not know who was buying the country club, but assumed it might be Hernandez. Aguila objected that these statements were irrelevant, hearsay, and conclusory, and the court sustained the objections. The court should have overruled them.
Given that the November 9 conversation forms the basis for the complaint of slander against David, we can hardly say David's version of that conversation is irrelevant. This evidence tends to prove he did not know Aguila and did not accuse Aguila of being a felon, and if he did so it was by unintentional implication and without malice, certainly "disputed fact[s] that [are] of consequence" to this action. (Evid. Code, § 210.)
Moreover, the hearsay objection was meritless. Hearsay is an out-of-court statement "that is offered to prove the truth of the matter stated." (Evid. Code, § 1200, subd. (a).) A well-established category of nonhearsay applies when "'the very fact in controversy is whether certain things were said . . . and not . . . whether these things were true or false, and in these cases the words . . . are admissible not as hearsay, but as original evidence.'" (Weathers v. Kaiser Foundation Hospitals (1971) 5 Cal.3d 98, 109.) "In these situations, the words themselves, written or oral, are 'operative facts,' and an issue in the case is whether they were uttered or written." (Am-Cal Investment Co. v. Sharlyn Estates, Inc. (1967) 255 Cal.App.2d 526, 541.) A defendant's allegedly defamatory words are a classic example of operative facts. "In an action for defamation, [the] defendant's statements are admissible to show what was said. The statements are not offered for their truth; quite the contrary, in a defamation suit, [the] plaintiff's claim is that the words were false." (Wegner et al., Cal. Practice Guide: Civil Trials & Evidence (The Rutter Group 2017) ¶ 8:1045, p. 8D-12.) Accordingly, the McCammacks did not offer David's extrajudicial words for their truth—that is, to prove the board president was selling the club to a felon—but merely to show what David did or did not say.
Along these same lines, they did not offer the rumor David had heard (that the buyer was a felon) or the board president's question (why did you file a protest?) to prove the buyer was, in truth, a felon or that David did, in truth, file a protest. They offered these statements for the nonhearsay purpose of showing the effect on David. (Holland v. Union Pacific Railroad Co. (2007) 154 Cal.App.4th 940, 947.) Having received this information about the buyer's background, and having heard the board president's question, David spoke to explain his actions and try to confirm the information. (Ibid. [explaining that a statement is nonhearsay when offered to show the hearer's reaction to the statement, not the truth of the matter asserted in the statement].) And as we have explained, David's motive and his reasons for speaking were certainly relevant to whether he acted with malice.
Finally, the challenged statements are not inadmissible as "conclusory." We see nothing conclusory about David's report of his conversation with the board president. The same goes for his explanation about his state of mind or knowledge of the buyer's identity. Aguila's objections and appellate brief cite no authorities whatsoever to support exclusion on this ground (or any other ground, for that matter). He also does not explain why these statements are conclusory, but simply asserts it.
In short, the court should not have excluded these statements from David's declaration, and we have considered the evidence in concluding the court should have granted the anti-SLAPP motion. But apart from these few instances, we need not address any other purported evidentiary errors. They have not affected our holding in favor of the McCammacks and so were not prejudicial to them.
IV. DISPOSITION
The orders denying the McCammacks' anti-SLAPP motion and granting Aguila attorney fees and costs are reversed. The trial court shall enter an order granting the anti-SLAPP motion. The McCammacks shall recover costs on appeal.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
FIELDS
J. We concur: MILLER
Acting P. J. CODRINGTON
J.